Insurance management platform provider DPL Financial Partners is working in partnership with Barclays to launch a new US equity index with Eduardo Repetto and investment manager Patrick Keating of Avantis Investors, which is designed to deliver high expected returns at low volatility, according to an announcement. is designed for. Called the Avantis Barclays Volatility Control Index, the index is specifically meant to facilitate the creation of fixed index annuity investments for registered investment advisors and their clients.
As per the announcement, the index is a first for Repetto, chief investment officer of Avantis and former co-CEO of Dimensional Fund Advisors (DFA). An index account option based on the Avantis Barclays Volatility Control Index is already available exclusively in Security Benefit Life’s Clearline Annuity on DPL’s platform. The index focuses on an additional return option strategy – hence offering the benefit of dividends – rather than a return value.
David Lau, CEO and Founder of DPL, said Repto’s leadership on index design has been a game changer. “We have Eduardo Repetto and Avantis creating this index,” he said. “Eduardo” [Repetto]Participating in this brings a lot of credibility.” Lau noted that DPL is looking forward to continuing to build the index, which it hopes will help eliminate some of the cost within the associated products.
While Repetto is widely associated with ETFs and other funds, it is turning its attention to annuities as advisors consider replacing fixed income investments with annuities. “When I learned about the fixed index annuity structure, I felt it provided a great opportunity to help advisors rethink asset allocation., “he said in a statement.[Fixed index annuities] Offer risk mitigation like fixed income, while diversifying the driver of returns away from bond yields. I think this structure can help advisors improve their clients’ portfolios, especially during these times of extremely low bond yields.
Repetto spent 17 years with DFA, including co-CEO and co-chief investment officer, before leaving the firm in 2017. As of 2019, Repato and Keating were developing and launching a new set of funds with American Century Investments. Funds targeted at fee-based advisors, a non-commissionable product, were designed to compete with DFAs.
Even some advisors who do not currently use fixed index annuities are seconding the new index, in part because of the repo. Timothy Kohl, principal of Bernhardt Wealth Management, a $534 million AUM firm, said, “I’m always skeptical of anything produced as a product, because then you have too many different hands in the pie that need to be paid for. Is required.” McLean, VA “Why does the SEC have warnings about indexed annuities? It’s pretty obvious; they’re complicated.”
But when a client emailed Kohl’s an article about annuities at the same time that DPL and Repetto announced the Avantis Barclays Volatility Control Index, Kohl’s is reconsidering its approach to annuities. He needs more information to understand which of his clients might be a good fit for a fixed index annuity, but Repetto’s design expertise has eased some of Kohl’s concerns. “It lessened some of my doubts to learn that Eduardo [Repetto] Included. I respect him as someone who always tries to act in the best interest of the customer,” Kohl said.
“We are traditionalists,” he explained. “We believe in a diversified global portfolio of stocks and bonds and we have found that for most of our retired clients, there is a 60/40 mix. [of equity and fixed income investments] Great job done.”
But annuities designed specifically for RIAs, combined with customer demand and concerns over interest rates and inflation, could be strong enough factors for Kohl’s to change its investment philosophy. “I’m really looking forward to learning more about the index,” he said, “and seeing if it can fill a gap for some of my clients.”
